Creative agencies see future in Brazil

Trevor Kaufman is CEO of Possible Worldwide, which acquired Brazilian digital agency Gringo in June

Creative agencies are investing more resources in Brazil as the world's fifth-largest economy transitions from burgeoning market to one shaping others around the globe.

"Brazil is kind of a new world. It's really emerging as a culture, as a global voice and as an economic force," said Trevor Kaufman, CEO of Possible Worldwide, a WPP Group interactive marketing agency.

Possible acquired Brazilian digital agency Gringo at the beginning of June. Sixty-five-employee-strong Gringo has produced work for clients including The Coca-Cola Co., Microsoft Corp. and Itaú Unibanco, Brazil's largest bank. Kaufman sees Gringo as part of a larger creative movement happening in the region.

"I am continually struck by how great the work is that comes out of Brazil, and I think a lot of my colleagues at other agencies have found the same thing," he said.

Direct marketers are key players in this creative movement. Brazilian agencies won six "Direct Lions" at the Cannes Lions International Festival of Creativity this year, compared with just one from Russia, India and China, which are often combined with Brazil into the BRIC business region.

A number of other agencies and holding companies have made acquisitions in the country this year. Publicis Groupe has aggressively added Brazilian firms to its properties, including DPZ, GP7, AG2 and Tailor Made in the past year.

Brazil has also reduced unemployment and inflation after a period of stagnation, and its government has also expanded Internet availability throughout the country, quickly growing the potential of digital marketing.

"Given the size of the Brazilian market and the GDP growth rate, when agencies and executives look at that market, they see an end market that is likely to outperform over the next several years. The proper time to make those investments is now," said Bruce Biegel, managing director at consulting firm Winterberry Group.

Jim Hodgkins, EVP of global marketing services at Experian, also noted "the rising income of the middle class in Brazil, together with more Brazilian consumers going online and using more digital channels."

The icing on the cake is that the country will host the FIFA World Cup in 2014, as well as the Olympic Summer Games two years later. But Brazil is already getting the world's attention. Kaufman said that the country is proving to be a force well beyond its borders as the source for numerous global campaigns.

"I just think we're going to see as things balance away from Madison Avenue, Brazil is one of the key markets that executives and decision making is going to migrate to," said Kaufman.